Why no Haitian terrorists?

Why isn't Haiti- failed state, miserably poor- an Al Qaida haven?

Amongst all the news from Haiti, one thing we never hear is that renegade groups of Haitians are bent on delivering suicide bombs to the US. Not only do they have ideal proximity, they have been shabbily treated by the US and other Western powers for hundreds of years. If poverty and "lack of opportunity", not to mention justified historical grievance, were sufficient for terrorism and suicide bombing, we'd be in far more trouble than we are. Why not?

Well, there is no denying the obvious, which is that Islam is the missing ingredient. Many other issues come into play, such as the generally friendly relations we have with Haiti despite all the burdens of history, to the point that the US hosts large expatriate communities with close ties to home, including remitting 15% of Haiti's GDP. ("For Haiti, one of the most affected LDC's- with close to 65% of its educated population found in the United States, the dislocation of much needed human resources is compelling.") And the overwhelming security unbrella/menace that the US represents, perhaps preventing any hanky panky in advance (hard to credit, really, knowing our capabilities, and considering Cuba next door).

No, it comes down basically to culture, and whether the bitter totalitarianism of Islam has touched down in Haiti. I am watching a bit of Spike Lee's Malcom X film biography, which is a classic example of such an ideology trying with all its might to establish itself on US soil, in the fertile and very justifiedly aggrieved black community. Separatism and militancy is the tenor, but the Nation of Islam did not take hold, nor Black Power more generally, and nor has generic Islam.

Perhaps we can thank Christianity for being a "commensal" or relatively benign religion, keeping away more virulent strains. Haitians are overwhelmingly Christian, 60% Catholic from their Spanish and French colonial history, and 25% or more Protestant with strong Pentacostal influence. Pentacostalism tends to be a striving religion, focusing on personal worldly success, virtuous living, and good business connections. This is quite distinct from the political focus of Islam, devoted as it is to authority, and political and social uniformity.

Pentacostalism (and Baptistm too) comes to society from the perspective that it is a small religion in a big society, striving to succeed in a pluralistic world dominated by others. Islam, no matter how marginal its community, comes at the question quite differently, insisting that not only its theology, but its sociopolitical program is perfect and absolute. Possibly in abeyance due to temporary weakness and existence as a minority, but the totalitarian goal is always clear and enshrined in scripture.

Most strongly fundamentalist cults will take a similar position, nurturing fervent dreams of toppling the reigning cultural paradigm. But few have armed jihad written right into their scriptural DNA, which makes all the difference here.

Catholicism in Haiti, as elsewhere in the Carribean and South America, has worn two faces- the static traditional form comfortable with ancient, not to say regressive, social hierarchies and personal, quasi-animistic devotions, and the other face exemplified by forcibly exiled Bertrand Aristide, termed liberation theology, which takes Christ as a revolutionary example, amenable to a communist, or at least socialist, social order. Haiti is strongly divided along these lines, as are many poorer countries, between the few rich and the many poor. As mentioned previously, this kind of divide is corrosive both to economic prospects and to the civil society. The rich have spared no effort, including calling in friendly US assistance numerous times, to suppress the socialist / populist movements in Haiti.

Fortunately, none of this has much to do with Islam. Islam can neither make unroads with the poor, who become even more oppressed in this religion, (women in particular), nor with the rich, who might like the additional social structure afforded by Islam, but not its strictures against hedonism and its relocation of cultural leadership to Arabia.

So, al Queda hasn't gotten serious footholds in some of the most promising areas in the hemisphere of their arch-foe for good reasons of history and culture which we can only hope will stay relevant as we continue (hopefully) to deepen and improve our relationships with Haiti during this time of catastrophe.

On the other hand, al Queda has been diversifying, now even taking up the standard of global warming. Next might be Keynesianism and progressive media diversification, not to mention internet neutrality(!), at which point Osama bin Laden may become a legitimate global leader of the poor and oppressed, yearning to breathe free. A sort of stateless Chompskyite counterpoint to the hyperpower head Barack Obama, who each moment seems to be regressing towards greater compromise with the vested interests. Who knows what the future of the global political scene might hold?

• Spending freeze is "Dingbat kabuki". The US government is not, and will never be, insolvent. If anyone were worried, it would be the Fed, and they would respond by raising interest rates to head off inflation. Are they? This policy buys into the defunct economics of the gold standard, which was replaced by Keynes only ... seventy years ago?
• How many Harberger triangles can you fit into one Okun Gap?
• Aussies have rednecks too.
• A conversion from atheism.
• Steve Jobs's megalomania knows no end.
• But the marketing has a few holes.
• When scientists don't know what they are doing.
• Contemplating the nuclear option.
• A. C. Grayling on the enlightenment.

Speciation in one country

How does sympatric speciation occur? New models clarify how species can diverge in place.

Despite Darwin's great work, the origin of species still remains something of a mystery, since beyond the depth of circumstantial evidence and the empirical demonstration of the details and mechanisms of evolution, speciation itself takes time- time that scientists don't have, as a rule, to stand around and watch. Traditional theories of speciation (Mayr and Dobzansky) demanded the geographic separation of two populations, giving them time to diverge by random processes without contaminating each other by interbreeding. But this is wholly insufficient to account for the facts of evolution. The Amazon is a hotbed of speciation, (or was, at any rate), and one can't possibly claim countless geographic barriers for so many speciation events. Sympatric speciation has to happen.

(Note that the terms "sympatric"- occurring in the same territory or "fatherland", and "allopatric"- occuring in different territories, were clearly devised in the patriarchial days of yore, possibly by German scientists!)

Allopatric speciation is clearly applicable to islands- the countless endemic species related to their mainland ancestors are clear evidence of such divergence. But how could 15 species of Darwin's finches diverge in place on the ~ten or so Galapagos islands? And how did the thousands of butterflies in the Amazon come about? They are mobile and can interbreed during their speciation.

The answer has got to be sympatric speciation. But evolutionary theory has had a hard time modelling that process, since any genetic divergence between two nascent species- two sub-populations of an existing species- is going to be swamped by interbreeding, exchanging genes that need to be kept separate if divergence is going to take place.

A recent paper by van Doorn et al. in Science takes a large step to resolving this dilemma by improving models of speciation to take sexual selection into account, finding that under realistic conditions, sexual selection synergizes with ecological selection to allow sympatric speciation. The situation they give themselves is an ecological setting where two modes of getting a living work well, such as a mix of large seeds and small seeds, (leading to Darwin's finches), or two differently structured plant flowers (leading to differentiated butterflies).

In this setting, organisms are favored which specialize on one of the two conditions, and disfavored if they express the average condition. Incidentally, this is one of many different evolutionary scenarios. Often a population benefits by the retention of diversity, such as in the case of human personalities and temperaments, such that all are better off when a variety of skills and attitudes are kept in the flock, as it were. But if ecological space presents a reason to diversify, then the question is whether organisms can follow suit to the point of speciation, even if they occupy the same physical territory.

The key to this new work is the realization that the occurrence of male ornaments that function both as marks of fitness and as female attractants allows females to select those males that do well in one of the two conditions. The marks do not have to be differentiated between the proto-species to start with, and nor do the female have to know which males are which, at least at first. Male ornamentation, like the colors of many birds or the dramatic designs of many butterflies, often acts as a sign of fitness- if the male is doing well, the colors are brilliant. If not, then not so brilliant, or perhaps in tatters. If females choose carefully, then they will reinforce the natural selection of males well-adapted to one or the other condition, even in the same territory.

After time, this process generates two sub-species that functionally specialize, even if they look identical, even to each other. When hybrids occur between well-adapted males of one specialization and females of the other, their offspring are less well-adapted, and especially in the case of males, less likely to propagate. I can't vouch for the math involved or all the assumptions, but the general idea makes sense. It would be quite difficult to put numbers on the various parameters, so the authors give ranges in some of their graphs:

Left- the relation between tendency to speciate (colors) vs migration rate between the proto-populations (Y-axis) and ecological specialization pressure (X-axis). Green represents the traditional modeling approach, where sympatric populations (migration of 1) only speciate with extreme selective pressures for specialization.

Yellow represents the addition of the theory of this paper, which adds female choosiness and male fitness signalling to the mix, allowing specialization to be amplified by sexual selection. On the right, relations are graphed between each of the above variables and time to speciation based on arbitrary modeled values and starting from a completely homogeneous population:

(B assumes migration quotient of 0.3, while C assumes a sigma/selection for specialization of 0.75. I'd note that these are rather permissive conditions for the theory presented, since I was really interested in fully sympatric speciation. On the other hand, there are other possible mechanisms at work that further contribute to speciation, like the ability of females to recognize one or the other male specialist, which is not part of the base theory presented here.)

What does sigma mean in this data? The authors state that it represents the (inverse of) intensity of "stabilizing selection within habitats". Which is to say- how strongly the ecological situation penalizes in-between hybrids versus pure-plays of either specialization. The left graph shows in proper fashion (lower right corner) that even if there is no selection of this kind, allopatric (island) populations will eventually speciate anyhow. On the other hand, sympatric species require some kind of push from their ecological setting to differentiate and speciate. In its absence, there is no reason to do so.

Biological traits involved in these models are:

x- the ecologically selected variation, such as bill size, which responds to the bimodal ecological issue at work.

t- investment in the male ornament, which is not differentiated with respect to x, but affects mating success.

p- female choosiness, which is what makes t useful.

The models also assumed a rate of mutation and evolution: mutations occur 1e-5 per allele per generation, and have effects on x, t, and p of 0.1, 0.1, and 0.05 respectively, in either direction at random. This is realistic for such issues as bill size, which are as likely to vary in one direction as the other.

So, in the end, this work provides one rationale whereby evolutionary theory can be fitted more closely to evolutionary reality, for speciation among organisms that make use of sexual selection (ornaments, female choice, etc.). This encompasses a large number of complex organisms (notably birds and mammals), and constitutes one theoretical explanation, among several others, for their particularly rapid speciation in the face of relatively low population numbers and long life-spans (relative to, say, bacteria).

• National Geographic has an excellent graphic of what is at stake in the status quo health care system of the US.
• On some of the rather byzantine ins and outs of Afghan politics.
• How long will we accept legislative prostitution?
• Do we torture/murder in cold blood?
• And have the terroists won?
• Graph of Haiti GDP related to Goldman Sachs bonuses and earnings. Good, or bad?
• The religion of the future.

Hate and Hope

I look back on Obama's first year, and compare the hate and the hope afoot.

For Christmas I received a wonderful book by Lady Bird Johnson- her White house diary, full of politeness and fine observations from her special station in life. One observation that struck me was of Harry Truman, who accompanied her to Greece for the burial of its King in 1964. (As an aside, her utter boredom on meeting the various royals of Europe, employed, unemployed, and pretending, spoke volumes). Lady Bird was truly happy around Truman, and observed that his cheer and kindness to everyone he met impressed her deeply, especially after the vilification he had gone through in office. I thought- what does she mean? Truman is very well-regarded in historical hindsight- what ever was the matter?

Looking into it more closely, it appears that the Republicans were the matter. Joseph McCarthy started his ugly career during Truman's administration, and Truman's firing of Douglas McArthur also caused a hail of criticism and hatred. On both counts, Truman has been thoroughly vindicated by history. These form classic examples of the susceptibility of the body politic to the fear-mongering and authoritarianism of Republicans. Which grand tradition continued this year in full flower, as Republicans trotted out "coddling terrorists", federal insolvency, Obama's "socialism", "missing" birth certificate, and "death panels", among many others.

Democrats are not immune to a bit of fear-mongering, such as Kennedy's "missile gap", LBJ's "daisy" ad, and the more recent (and more justified) responses to Bush's plans against Social Security. But it seems part of the DNA of Republicans to match their hatred for government in general with distain for civility and, in an odd way, for their constituents, who tend to be divided between the very poor (and uneducated) and the very rich (who need no education to influence policy). Something unconscious is going on here- deeply temperamental differences between the parties that divide our political spectrum:

These political temperament maps come from politicalcompass.org. They even have a map of famous composers.

One would imagine that people who temperamentally favor authoritarianism would have a basic respect for the government, (i.e. authority), whatever its composition. But that turns out not to be true. Such lack of respect propelled fascists to power in the last century, by totally undermining nascent democracies in favor of new hybrid religio-cult-totalitarian systems. The reason is that democracy is fundamentally a problem for the authoritarian mind-set, not a solution. The whole transaction whereby citizens deliberate on what they want as common goods and who might best render those common goods is problematic for an authoritarian, who instead seeks a stable order with a strong social hierarchy featuring strong leaders, based not on rational (and thus dynamic) utilitarian grounds, but on deeper connections ("religo"), such as Volk, religion, nation, blood, "traditional values", commune, or other quasi-religious ideology. A sort of patriarchial family writ large.

The amazing durability of the idea of nobility and royalty is a testament to this mind-set, deeply seated in everyone, but more so in some than in others. Just when the rationale of royalty had expired in the wake of the Enlightenment and the French revolution, Napoleon got right back on that horse, making himself an emperor and authoring yet another royal house in a Europe already infested with them.

Another manifestation of the authoritarian mindset is a problematic relationship to reason and truthfulness itself. For if the social order is supposed to be fundamentally staked on properties other than reason and utility as realized in a Lockean social contract, and instead on emotional buy-in to strong social hierarchy such as an aristocracy or royalty, undergirded by theological or ideological support, then getting there hardly involves reason, does it? It involves deeply emotional arguments that speak to what advertisers would call our "reptilian" brain.

But back to the "death panels". Republicans, having fallen so suddenly out of power, have understandably seized on any tactic that comes to hand. As with the Gingrich "revolution" before them, they have grasped at ways to de-legitimate the administration, with false scandals (remember Vince Foster?) and endless inuendo. Trained in the notorious Young Republicans, they don't fight fair, since their whole attitude towards the institutions they are dealing with is one of distain rather than respect.

The point, as Grover Norquist and many others of the hard right portray it, is to gain power for the sake of strangling the institution, thus creating a new dispensation of freedom and traditional values in the land, maintained by .. well, it is difficult to say, but since the democratic state may be construed as inherently a liberal institution, other institutions more amenable to authoritarianism, such as corporations, churches, and the military are the typical power centers in this desired world. Some segments look forward to total anarchy, of course, where society (or those "left behind") retreats to the hardy frontier ethic of every clan for itself.

Ugly as this is to witness, I understand it as a psychological issue. The structure of our centrist, two-party system dictates that there will always be two roughly equal sides to the great debate- sometimes aligned along the libertarian-authoritarian axes of the diagrams shown, sometimes more along the communism-neoliberalism axes, which is to say, between egalitarianism and economic differentiation. The Republican party, taken to ideological extremes in the last twenty years, has briefly fallen out of its position of ~half the electorate, (partly due to the disgracing of its ideology by reality), and will only find its way back once it recaptures some middle ground in temperamental terms.

But another option for Republicans is to successfully activate latent authoritarianism in enough of the electorate, bringing them over to their side instead of compromising with the middle. Thus the campaign of fear and hate. It is commonly observed that wars help the incumbant by activating unifying feelings / ideologies. George W. Bush shamelessly used fear and terror for political gain, going so far as to raise the terror alert level at politically convenient times. Though this kind of politics is the sort of thing we rue at leisure, (and in the long lens of history), it can be shockingly effective in the short term.

Here's me!

Sorry about the rant, but this is partly why I am so impressed by Barack Obama's first year. He campaigned on, and is carrying out, a huge agenda. He has been harrassed in ways large and small by a revanchist opposition that is poisoning the body politic through its rhetoric, amplified through its house organs (Sarah Palin: "I am thrilled to be joining the great talent and management team at Fox News. It's wonderful to be part of a place that so values fair and balanced news,").

With all the compromises, and the bizarre masochism of the Senate and its "rules"*, Obama has accomplished heroic tasks, especially in saving the economic system from freefall, and in making solid progress on health reform and climate mitigation. While I carp constantly that there is much more to do and better ways to do it, a great deal has been done. Obama's ability to maintain his moral composure and progressive aims amidst the relentless pressures and drains of office is deeply impressive. I only hope he can keep it up. Lady Bird recorded how the office was slowly killing her husband- a willing sacrifice to the country they both loved, yet painful to see, especially in another Democratic president with high aims and great skills.

* Obviously, the Senate at very least needs to reinstate the requirement for Senators to actually speak for the duration of a chosen filibuster, with cameras going.

~~~

My heart goes out to Haiti, whose suffering seems to know no end, despite a very high level of religious devotion. Haiti was also subject to a coup by the Bush administration in 2004. A News Hour report showed one woman lying on the street, babe in arms, with compound fractures in both of her lower legs- helpless, and likely hopeless as well.

• Podcast discussion about the Enlightenment and its authoritarian adversaries.
• Fascism and sociology, a somewhat dry view.
• A fellow puzzled pundit.
• A green view of Obama.
• A long view of economic rights and amelioration.

America's greatest alchemist

George Starkey: Harvard-educated alchemist and all-around crank.

It is hard to recapture the days before chemistry was a science, when the material of the world and our own bodies was a thorough mystery. All kinds of theories ran rampant, from organic models of metals "maturing" in the womb of the earth, to Democritus's theory of infinitesimal and diverse atoms in constant motion, separated by space. Total ignorance didn't keep people from making up theories, but it did make most theories dramatically psychological, involving sexual unions, wombs, sperma, and feces, comingled with the highest ideals of incorruptible matter and everlasting life.

Already from Greek and Islamic alchemists, the field had inherited a great deal of technology concerning the separation of metals from ores and from each other, dyes, fabric treatments, papers, inks, distillation, preparations of acids, sulphur, ammonias, explosives, etc. But alongside all this, and of far greater mystical attraction, was the "greater work"- quests for elixirs and something familiar to readers of Harry Potter- the philosopher's stone. This mythical beast, often sought in a "subtlized" marriage of mercury with small amounts of gold or silver (among many other possible ingredients) would stoutly resist the heat of any fire and transmute base metals such as lead into gold.

Image of the star regulus, a compound of antimony now called stibnite.

"Gehennical Fire" by William Newman, describes the career of one of the last great alchemists, George Starkey. Born in Bermuda in 1628, he attended Harvard in the 1640's, then pursued his career in London among the leading chemical lights of his age, before dying of the plague in 1665 in the midst of treating others with his alchemical "cures". Most remarkable to me was the primitiveness of chemistry at Harvard, not because it was not current with the latest ideas from the Old World, but because those ideas had hardly advanced beyond the opus received from the Islamic alchemists five hundred years before (especially, translations of Geber/Jabir by secular scholars Robert of Chester and Gerard of Cremona) and other ancients.

The degree process at Harvard sounds very much like a monastic disputation, long on direct debate, rhetoric, and scholarly citation, short on factual basis. They were still pursuing Aristotelian and Galenic ideas, combined with the newer Helmont-ism, among many other alchemical influences. Indeed, as late as 1771, a thesis at Harvard proposes: "Can real gold be made by the art of chemistry? Yes." In 1767: "Are all bodies (metals and stones not excepted) produced from seed? Yes." In 1761: "Is there a universal remedy? No." So Starkey was at the cutting edge, and became quite well-to-do as a New England doctor after graduating.

But he had caught the alchemical bug, preparing varied pharmaceuticals for his medical practice, but also experimenting on his own among the metals. He also began a fertile writing career, some in his own name, but far more successfully under the pseudonym Eirenaeus Philalethes. In 1650, he decamped to England with his young family, apparently to try his luck in the scientific center of the day. He had a long friendship with Robert Boyle, who, while a fellow alchemist and jack-of-all-sciences, was far less enamored of secrecy than was Starkey. Boyle was extremely rich, however, so Starkey engaged in a continual dance of disclosure with him to remain in his good graces, while hiding as much of his deepest secrets as possible.

Starkey was afflicted with drunkenness, a biting tongue, poor advertising skills, and a hopeless devotion to his art. In England, worked himself into destitution and isolation while seeking the philosopher's stone and other alchemical grails, as had so many others. Support came fitfully from Boyle, and from various sidelines in alchemical medicines/pills and perfumes/aromatherapy. Numerous ex-partners hounded him for fraud. He even tried political pamphleteering, which failed to gain him the royal preferment he sought from Charles II. Few who knew him seemed to like him, despite substantial respect for his (al)chemical chops. None suspected that he was the author Eirenaeus Philalethes, whose works led the field, becoming Newton's most valued alchemical references, and finding a second life among the Rosicrucians through the next two centuries. Some titles are:

The Marrow OF ALCHEMY Being an Experimental Treatise, Discovering The secret and most hidden Mystery OF THE Philosopher's Elixer.

SIR GEORGE RIPLYE'S EPISTLE TO King Edward unfolded. Chymical, Medicinal, and Chyrurgical ADDRESSES: Made to Samual Hartlib, Esquire.

SECRETS Reveal'd: OR An OPEN ENTRANCE TO THE Shut-Palace of the KING. Containing, The greatest TREASURE in CHYMISTRY, Never yet so plainly Discovered.

TRES TRACTATUS DE METALLORUM TRANSMUTIONE

Here is Starkey satirizing some of his alchemical competitors, adherents of Sendivogius

"Yet reason with them on their work, and they

Will tell you of a monstrous uncouth Sperm

Panspermion called, this without a nay

Must be called Chaos for to use their term,

Of this is made each thing that in the Earth,

Is found, out of it all things are brought forth

It hath no proper form, yet being hath

'Tis non-specificated, therefore apt

All things to procreate, such is their faith

That as if they were in a vision wrapt,

They see in fancy such a thing as this,

And yet alas they know not where it is."

But he had his own dalliance with wrapt-ness in visions:

"This Chaos is called our Arsenic, our air, our Luna, our Magnes, our Chalybs, but in diverse respect, because our matter undergoes various states before our Regal Diadem is extracted from the menstrual blood of our whore. So learn who the comrades of Cadmus are, and who the Serpent who ate them, what the hollow oak, on which Cadmus transfixed the Serpent. Learn what the Doves of Diana are, which conquer the Lion, I say, which is really the Babylonian Dragon, killing all by means of his venom."

Newman explicates this passage in detail, giving identities to each element involved in making an amalgam of antimony with silver, sulfur, and mercury. Yet time and again, Starkey also thanks God for giving him the final formula for one of the grails of alchemy:

"From the year 1647 up to this year and day [1658], I have exerted myself in the search for the liquor alchahest with many studies, vigils, labors, and costs. Today (first) is has been granted to me and conceded to my unworthy self by the highest Father of Lights, the best and greatest God, to attain complete knowledge of it, and to see its final end. To Him let there be eternal praise, both now and forever. Amen."

Newman is particularly concerned with deciphering the coded language of randy queens, noble kings, potent sperma, green lions, and endless other obfuscating, metaphorical, language (for a fine example, examine this text). Newman's view is that his ability to recover a good deal of sense out of this ouvre, encompassing many basic operations of alchemy as well as the more etheral aims of the ultimate elixirs, transmutations, etc., which were all expressed in highly coded, richly metaphorical language, disproves the idea held by Jungian scholars and others that the alchemists were engaging in psychological, more than chemical, exploration.

I would beg to differ. Newman's lengthy exegisis of these issues is quite heroic, not to say occasionally tedious. But alchemy was ultimately sterile with respect to its own aims- there was no elixir, transmuting stone, or universal dissolvant (i.e., the liquor alchahest, to which Starkey was particularly devoted). These were purely psychological projections- theories with little empirical input and much fervent imagination. Through its practical operations and its curiosity about the properties of matter, (and through more sober heads than Starkey's), alchemy ultimately led to modern chemistry. But that was only by virtue of shedding the countless projections and psychological encumbrances that characterized it for hundreds of years, whether expressed in allegorical codes for basic procedures, or in free-floating fantasy. (The modern new age community perpetuates many of these tropes.)

An interesting comparison can be made with shamanism, (and its modern remnant, theology), which offers medical cures and esoteric knowledge as does alchemy. Shamans tout their cures and powers, but, beyond than spinning elaborate myths, are tightly secretive about their ultimate nature and origin. Shamans engage in complex public as well as private rituals and preparations whose purpose is to motivate an extensive placebo effect, as well as a self-delusional system of putative knowledge and magical powers.

The richly psychological language of alchemy had similar effects, of both publicizing the knowledge and esotericism of the adept, while veiling its actual operations and origins. In both cases, real procedures are engaged (creating medical concoctions, assimilating vital forces from the inanimate world into the animate world, or from animals and plants) and described in flowery language.

But in neither case is the practitioner ultimately able to carry off the work, other than in the minds of his subjects. As soon as alchemy passed from the imaginary to the concrete science of chemistry, the veils fell, the language became specific and pointed, (and terse), and powers heretofore only hinted at were either set down and described for fame and profit, or else demonstrated as chimerical. Knowledge turns out to inhabit a different psychological landscape than the portents of knowledge.

• Complete idiot's guide to alchemy.
• Newman article for PBS, and his own school.
• Triumphal chariot of antimony.
• List of alchemical equipment, and ordering site.
• I have to re-recommend this economic analysis of the current crisis.. very insightful.
• And if you bank with a piggy bank, consider switching.
• Are we happy now?

Greed is bad

One would not think it needs saying, but apparently it does. Greed is bad.

One of the most dramatic changes in our culture over the last few decades has been increasing inequality. After the trauma of the Great Depression, New Deal, and World War II, the social contract included steep taxes on the rich and explicit care for the unemployed through fiscal support and monetary Keynesianism.

This led, as Paul Krugman and Robert Reich among others have portrayed it, to a sort of golden age of economic egalitarianism, where the rising tide really did lift all boats, through the staid and productive 50's and the incredibly hopeful 60's, doubling real incomes across the board. In contrast, the last decade's economic growth gave all of its dividends to the rich, with the lower 80% experiencing no increase in real income or living standards, rising debt and declining wealth.

Chapter and verse are given here, and I select a couple of graphs to illustrate:

Hourly production wages, 1960-2004 (left), real GDP per capita (right)

Share of Wealth Owned by Bottom 80% 1979-2003

We rank 95th out of 135 ranked countries in economic equality, measured by a broad statistic called the GINI index.

This is a bad thing. It is a bad thing in simple fairness terms, for it is highly unlikely that only the top 20% of the population has increased its productivity. And it is bad for the long-term health of the economy and the society. The decline of Rome seems to be largely due to extreme inequality, where large landholders (exemplified by Senators) gathered more and more wealth, pushing serfs and slaves deeper into penury, while exempting themselves from taxation through political corruption. The end result was that the Western empire, after hundreds of years of power and cosmopolitan intercourse, sank gradually into poverty and thence into history.

As Keynes pointed out, an economy composed of the rich alone is a poor economy. Luxury spending is fickle, wasteful, and insufficient, compared to spending by a broad middle class. It is all about private goods and fails to support public services like education and infrastructure, except inthe guise of philanthropy, where it is likewise fickle and idiosyncratic, rather than broadly rational. And needless to say, it multiplies human misery. So why have we been tilting the economy strongly towards the rich over the last few decades?

I will leave the religio-politics and ideological economics aside for the moment. It seems that the capitalist system, left to its own devices, tends in the direction of stark inequality. Organized crime is a case on point, where the more organized it is- the better the various resources, like territories and businesses, are shared out among various families- the more equal the results. But the more robust the competition, the fewer families survive to enjoy its dividends.

Free markets tend toward efficiency in many cases, but firstly, market failures are depressingly frequent (medical care being a glaring example, not to mention "high" finance), and secondly, we have long recognized (since at least the institution of the progressive income tax and similar mechanisms) that the public/state has a duty to ameliorate the natural ratchet of the market, both controlling the terms of corporate and market activity, and redistributing wealth to directly counteract its natural concentration in naked capitalism.

"Civil government, insofar as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, and for the defence of those who have property against those who have none." -Adam Smith

In field after field, whether acting, sports, agriculture, law, finance, management, etc., the rich get richer and the rest get poorer with time. Whoever is best in a field can attract a bidding war, while an excess of aspirants generates a corresponding ratchet down in pay for the also-rans.

This is simply the market at work. I am not sure whether it is an iron-clad Malthusian law, or something more contingent on the cultural moment, the corruption of government, etc., but it seems to be the trend of economic history, played out in ancient and modern times. Dramatic exceptions only prove the rule. One example is the period following the black plague in Europe, where, following a depopulation of approximately half, the amount of land did not decrease, leading to high demand for labor and high wages, leading in turn to a weakening of feudalism and other markers of increased power and income among the lower classes.

This also led to general cultural and economic progress. Scarcity of labor has historically been one of the most fertile inducements to economic progress, especially in terms of technology and productivity. Necessity is the mother of invention, and conversely, infinite labor supply is the mother of technological stasis. Today, US farmers claim they couldn't survive without hot and cold running illegal labor. Yet a century ago, they prospered through technological innovation. Innovation continues in agriculture, but the reliance on cheap labor is a very regressive aspect, both for agricultural communities, and for our agricultural practices and for productivity at large.

But this is just a small part of the general corrosiveness of large-scale inequality. As Bill Mitchell says:

"As an example, the most recent literature on economic growth and development is that more equal countries grow faster, other things equal. The strong empirical finding that emerges is that there is a positive relationship between equality and growth. More equal societies generate better educational outcomes and result in higher skill levels than highly unequal societies. The old neo-classical growth models could never conceive of this because they asserted Principles (such as the so-called law of diminishing returns) that denied it as a matter of logic. Never mind looking out the window.

...

The link between equality and growth is also developed in the public health and sociological literature. It is indisputable that poverty drives other social costs including poor health, increased crime, ghettos that create spillovers of disadvantage. Mainstream economists tend to ignore this literature."

So, not only has the last decade been a dead loss (Krugman), but the last several decades have been heading us in the wrong direction. Wrong morally, economically, and culturally. The work of the Obama administration has ironically been to re-feed the monster of finance, hardly attending to more basic dynamics. The political system remains hungover from the Reagan era, when greed was good, markets were king, and public service was spat upon.

For example, the inheritance tax is a prime fixation of the ideological right. The "death tax" is the final indignity administered by the state to the freedom and dignity of its citizens. But you can't take it with you, so a less hysterical representation might be that the tax stands in the way of a durable class structure, i.e. an aristocracy. The question is whether we should give the next generation, differentiated already by their various genetic and cultural endowments, a financially fair start in life, through the generous provision of public goods, or whether personal financial empires built by whatever means, fair or foul, be allowed to turn into enduring family empires.

"When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues."

... But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still." -John Maynard Keynes

Another example is the mantra of "motivation"- that executives require superlative pay to properly motivate them to execute the shareholder's interests. This has resulted in those managing the cookie jar helping themselves to cookies in the dark of night while telling others in the household that downsizing is needed since there aren't enough cookies to go around right now.

Needless to say, shareholder (i.e. public) interests are best served by keeping as much money in the jar as possible, rather that giving it to managers to "align" their interests with those of the institution. The agent problem is a difficult one, but such bribery, now exposed in the financial meltdown as more akin to embezzlement than "pay", is a highly dubious way to address it. Psychology tells us that people can be motivated in many ways and by miniscule rewards, so putting that genie back into its bottle, while difficult, is important and manageable.

“Regarded as a means, (the businessman) is tolerable; as an end, he is not so satisfactory.” -John Maynard Keynes

Markets are tools to further the public goods and private freedoms, not embodiments of them. Many goods arise out of corporations and markets, but these institutions are inherently amoral, as well as being fundamentally dependent on the state for existence. Government, in contrast, is our collective moral actor whose role is to control these amoral actors. Countless other organizations act for the common good- nonprofits, foundations, religious communities, and so forth. But only the government has (by common consent) the coercive power, among many others, to control what have become extremely powerful market institutions.

And these institutions have been generating increased inequality with little general good to show for it. So, quite simply, it is time to turn back the clock to a new new deal, where we collectively focus our efforts on taming private markets and providing more public goods. With that, I wish you a tentative happy new year and happy new decade.

Bill Mitchell's Saturday quiz question, 1/1/2010. Please answer True or False:

"As soon as adult individuals adopt social norms and start making decisions together which impact on each person in the group, mainstream economic theory becomes irrelevant and the competitive model of decision making and optimisation loses authority. It is only when individuals behave as psychopaths (according to the clinical diagnosis of psychologists) that the mainstream economic theory of choice has any traction at all."

• Keynes had it all figured out, really.
• Another good analysis on the current difficulties. Liquidity isn't enough- the banks remain insolvent.
• Macro view, same institute.
• Fascinating, though speculative, column on what's next in the housing implosion.
• But perhaps the decade has been pretty good, for the rest of the world.
• Bill Mitchell's cry into the wilderness of loanable funds.
• Topical, though very long, interview on inequality and class in America with Richard Sennett (esp. part 2).
• Money and the corrosion of society.
• Shalizi on what comes after the revolution.
• What's the word in green this week? Thorium.